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Us 25, Israel 23, Europe 14, Aig 9, Chicago 9, Asia 9, S&p 8, U.s. 8, United States 7, Morgan Stanley 6, Nicole Petallides 5, Rahm Emanuel 5, Nicole 5, China 5, Navistar 4, Ashley 4, Humana 3, Bp 3, Jason Trennert 3, New York 3,
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  FOX Business    Markets Now    News/Business.  
   Business news. New.  

    September 10, 2012
    1:00 - 3:00pm EDT  

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[♪...] call or go online now. [♪...] >> good monday afternoon. one o'clock eastern. i'm lori. >> i'm melissa francis. liz has the bottom line coming up. >> i'm not excite about this yet. >> you're not? no? >> about the profit on aig? not at all. look ag the timing. teachers on strike in chicago even after a 16% raise. what this could mean for the mayor's future, and, by the way, we just heard from the mayor of chicago. nothing new. it's a strike of choice.
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plus, will we see the release of the strategic patrol yum rereceivers and help at the pump closer to election day? that's suspicious. we'll ask steven in a few moments. >> let's kick it off with a stock check. nicole, stocks waiverring back and forth. >> there's a lot happening that everybody's waiting for as well. of course, the federal market committee has a policy meeting wednesday and thursday. we find out more as they reveal their thinking these days. so much an anticipation for monetary similar -- stimulus. they are pulling back after last week's 215 point game. you have the bank stocks doing well. retailers and as far as energy, some of the services indexes higher, but take a close look at bp in particular. bp is selling off assets. $5.5 billion worth of assets. we are looking closely at this name. these are interesting some
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operated assets by the company. it's up half a percent right now. back to you. >> nicole, thanks so much. so the treasury is moving to unload the rest of the aig stake, but it's the timing raising eyebrows here. we have the bottom line. >> you know, you can't use any words that will be basically an understatement of what went on with aig; right? big is not an understatement. the biggest, controversial bailout leading to other bailouts. aig ensured bad mortgage bets that led to taxes on bonuses, and aig gave up 165 million bonuses causing an uproar. will they earn a profit? that's the deal. here's the problem. they basically got almost $68 billion in cash from t.a.r.p.. they basically recooped almost $45 billion to-date. now, yesterday, they announced an $18 billion stock sale. moving on it today.
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the treasury will still hold investment in aig stock. will the taxpayer profit? the federal reserve earns a profit; right? they make $12 million because all in, aig had $182 billion in available credit lines and accessed $161 billion out of that. treasury still saying mum whether they are going to earn a profit, and why sell now? the stock has been improving. >> why now? >> yeah, that's right. basically, break even, at around $29 for taxpayers to break even. it is improving to $33. why sell now? that's the question we put to the treasury department. they say the white house has nothing to do with the decision, to do the $18 billion sale. we decided not the white house, and we thought we could get a good price when we think the market can bear it. they have about $870 million shares in aig that the taxpayers still own.
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flooding the market could depress stock prices further. that's the issue. the taxpayers still owed $27 billion from gm, $14.7 billion from allied, and all in, i think the taxpayers are going to lose money on all bailouts. is this a plus to the administration to move on it now? is it questionable? yeah, i mean, that's the issue. that's the lay of the land right now. >> fascinating on so many levels. thank you. >> smore, delighted. >> the fed doing little to prop up the prices of gold and oil today. fox business contributor, gold easing from a six month high here, phil. >> a little of a break. that b doesn't stop the big banks from getting bullish on metals like crazy. every big bank coming out of the woodwork raising expectations. we had ubs and standard bank both saying the gold and silver price get higher. ubf says we can see silver up
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near $37 and gold near $17 # 00. they are not the only ones. you heard a lot of the big banks just raising their expectations calling for a record high because of what they expect from the federal reserve later this week, and that's more stimulus. oil prices today pulling back a little bit, but they have been flux waiting quite, and saudi arabia says europe's getting all the oil they could want, everything they could ask for. no signs cutting in production, and the oil prices still down a bit, but coming off the lows. back to you. >> sir, thank you very much. >> so the white house is gathering intel for a potential npr release, and the dismal jobs reports fuels the president's plan to tap our oil reserves. joining us is editor of the report. let's get to it. it seems political we have an spr release right now because there's not any kind of an emergency going on; right?
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>> that could be. there's plenty of crude oil which is what the spr is. to be highly cynical, no, an spr release is nothing but politics. the problem is we have a refinery capacity in the country, but not enough gasoline, but that's highlight the now with the destruction of hurricane isaac. with that said, the surge in oil and retail prices -- >> hey, steven, we're having trowel with -- trouble with the audio. don't go away, everybody. we'll fix that and be back with the potential release and what it means for prices for you at the pump. we'll be right back.
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>> all right. we're back, and we ironed out all the kings with editor of the short report joining us via scion. he won't sound like he's in a tin can now, but he does look like he's in the dark. bear with us. we don't have a shortage of oil. >> right. >> we don't have the refining capacity to take care of it, and shell just started drilling yesterday which they paid about $3 billion for four years ago. they just started yesterday after all the complaints. there's no sthornlg -- shortage of oil; right? >> absolutely not. we have a surplus of oil right
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now. the problem is in a couple weeks obama and romney face off in the first debate. romney has a big stick to smack obama with when we have gasoline prices as $4 a gallon. when obama was debating for the first time, gas prices were $2.50 rather than $4. now, given the administration's less than delightful embrace of the oil industry, it's easy, for right or for wrong, legitimate or not, it doesn't matter. >> talk about the for right or for wrong. can you blame the president that prices are up more than 100% at the pump? can you blame the president? is there anything to do right know to bring down prices right away? >> no, there's nothing he can do right now, and certainly, the environment that he's created over the last three years, i think you can make a legitimate argument that in the long term, it is supportive of higher prices. >> like what? >> to target now $4 a gasoline,
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it's not fair. you have to keep in mind where we were in 2008 with the economic downturn and we were following a major bubble implosion in commodity prices. >> without question, but you say you could make the point he's created an environment that in the long run raises the prices of oil? how? how do you make that argument? >> well, look who runs the department of energy on record saying the biggest goal, first year in office was to bring gasoline prices as high as they pay in europe. at the time in europe, they paid $5 a gallon in gasoline. today, they pay $7.50. just the rhetoric from anywhere between the white house, the secretary of state, the secretary of treasury, they are well-documented rhetoric towards the industry, and then politics of all, all we have to do is look at the decision on key stope, kicked that can down the road. that decision to get cheap oil
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from canada to the goffing was a no-brainer. he played politics with that. >> talking about the head of the department of energy who said our economy should be run on ethanol which is, you know, plant fuel opposed to oil. he's a theoretical physicist opposed from being from the industry. >> that's great if you want to pay ten bucks a gallon. perfect. >> tnk you so much for coming up. >> thank you, melissa. ♪ >> you know what that song means, it's time to make my time with charles payne. >> going to vegas? >> going to vegas. he's the thing about wynn casinos. the stock has been high because mccal who is just amazing, but news out the vegas strip might be coming back. strip revenues up 27.5%, $597 million. that pails to mccal over $3
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billion. mccal will has been the problem, wind -- sales slow. there's a meeting of conversations and exhibitions. >> mice? i don't know that that's a great acronym. we got mice. great, i want to come join. anyway -- >> good point. >> that's not great. >> this is the chinese government, okay. >> okay. >> they did not want american casinos there initially because they have the ability to make it a family destination. they thought they had too much experience over the local operators, but now because of the economy, go with it. let the mice run free. this helps win out a lot. you have vegas coming back nicely. it teaks care of itself. an interesting aside, of course, have you followedded the lawsuit between steve wynn and joe francis? >> yes, yes. >> amazing, suspect it? >> yes. >> of course, they brought in
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quincey jones who was in a wheelchair, and those not familiar, joe francis, girls gone wild, made a lot of money, spent a lot of money, gambled away a lot of money and had bouncers for a million dollars, and he doesn't want to pay it. steve wynn threatened to break my leg. one million to win is not all the money in the world, but it's an interesting, fun story. >> it is. you'll have to follow that for us. he's sorted history himself. thank you. >> thank you. >> let's check the market. watching sprint today? >> that's right. take a close look at sprint, on the move to the upside, and it's double -- over 100% year-to-date, but a positive call on sprint, and so the stock is up 5% today. let's go through some of the numbers. right now, at $5.28. the price target is actually $7 saying that the tail winds bound for the third largest u.s. wireless carrier behind, of
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course, at aaron and -- at&t and verizon. why positive words about sprint? cost savings from the upgrade gaining credibility, and just at the competitive risks that sprint's supposedly has, well, those are overstated so that's why sprint. back to you. >> nicole, thanks so much. coming up later in the hour, lou dobbs take on the teachers' strike and what's at stake on both sides. >> let's check the dollar, how it's faring today. stronger for europe, but the euro is elevated over the last couple weeks, 127.89 is the exchange. back with more after this. [ male announcer ] let's say you need to take care of legal matters.
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and the mailman picks it up. i don't leave the shop anymore. [ male announcer ] get a 4-week trial plus $100 in extras including postage and a digital scale. go to stamps.com/tv and never go to the post office again. >> at 20 minutes past the hour, this is your fox news minute. president obama raised more money in august than mitt romney, and that's the first time that happened in four months. the president pulled in more than $114 million last month compared to romney who raised just over $111 million, but
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august was also the third straight month in which romney collected more than $100 million. firefighters have their hands full in central washington state battling dozens of fires caused by lightning. crews worked through the night to protect homes from a 500 acre fire. residents in the area were told to evacuate over the weekend. and williams won her fourth u.s. open championship, and 15th grand slam titles. williams was two points from defeat when she won the last four games to beat victoria. it was the first three sets womens final in new york since 1995. the men's final will be played later this afternoon. those are your news headlines on the fox business network. now back to melissa and lori. >> unbelievable win. thank you so much. all right. during the height of the financial crisis, citi group agreed to sell to morgan stanley in a deal that would take years
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to complete, and they are still haggling over the price. likely that ends this afternoon, and who else but charlie has all the details on that. >> well, it's kind of interesting. the -- kind of a conflict of interests. doing the evaluation, and joe pro was a long time head of investment banking at morgan stanley, but wineberg thought to be independent, and they'll have an evaluation. it's interesting, if there's one thing that set citi group apart in the financial dry sis aside from receiving the most bailout money was unloading assets including the brokerage department which they had to do just for capital purposes. since then, it was a complex deal, sell it in chunk, although morgan stanley has the ability to buy this in chunks. they are two-thirds of the way through. what's fascinating is there are accounting issues here. they are valued at a certain level, mori can --
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morgan stanley says it should be layer because they want to pay less. they are at odds. this is what i think happens. i know joe well, and if he follows the example, he splits it down the middle. it's not what morgan stanley is or what citi group says it is. it's down the middle. they will have a hole on the balance sheet because of that because they carry at too high a price. whether it's material or not, i don't think so. in the end, this is making good headlines because two firms hate each other, fighting over price, but in the end, it's much ado about nothing. we'll find out later on today. >> thanks so much. all right. it's going to be a big week for currencies. start cheering. we got the fed decision to impact the dollar, and also, an important ruling from germany. what all of these events, all of this news around the world will impact our dollar for you next. >> as we head to break, look at
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today's winners and losers on the s&p500. sprint trading higher by about 5%. we'll be right back. ♪ when we got married. i had three kids. and she became the full time mother of three.
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it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.
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lori: time for stocks now as we do every 15 minutes. time to to to the floor of the new york stock exchange where we find nicole petallides. carl icahn sounding off against navistar. why? >> we know carl icahn lets his thoughts be known. look looking at navistar basically it is to the downside. he is saying the decision to make lewis campbell chief executive officer he wrote a letter to the company, a
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poster child for abysmal business decisions poor corporate governance. he is sounding off to navistar and talks about to offer board seats to some of the shareholders. they're trying to respond. they're disappointing, navistar disappointing carl icahn expressing these thoughts. they say they have a clear path. western digital naming a new ceo. ceo, john c.o.i.n. retired. don't forget that. western digital is under pressure. back to you. lori: thank you so much, nicole. melissa: so the "wall street journal" sponsored conference innovative invest israel is underway. joining us now with more is adam shapiro. adam, what's going on? >> well we're going to turn our attention now to something not only important to israel's economic future but to its actual security and that has to do with energy independence. joining to us discuss israel and israel natural gas, the state-owned corporation, is the chairman of the company.
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and it is a pleasure to have you on fox business. the gas fields discovered last couple years, the tamir and the levithon gas field have the potential to make israel energy independent but israel an energy exporter. how quickly will that happen? >> this will happen, that's for sure and the question when i will happen is depends how fast we can plan infrastructure, bring the right investors to participate with us, to partner and then be able to export. we have over 900 potential bcm in israel in the current discoveries. exporting out of israel is essential. it conventional for the -- essential for developers. >> calendar year for the exports could that be for the next three or four years we could see this happen? >> we hope so. >> coming online in the next
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few months potentially is the ability for israel to import liquid natural gas. this is important because in the states we keep hearing about the explosions to the pipeline, gas pipeline from egypt. this would potentially allow israel to circumvent that pipeline. that could come on before the end. year is that correct? >> that is correct. the company i'm chairing and established basically built the infrastructure. together with right part first, italians, french and americans who are helping us build this. by the end of the year we will have the being able to import liquid natural gas. >> this is offshore buoy much like we use here in the united states off the coast of dell wear and new jersey? >> that's it exactly. >> you have partnered with british petroleum. they will start delivering lng, is that correct? >> that is not done yet. one we're doing is accelerate energy. an american company. that we like and trust.
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and hopefully they will be our partner in exporting, or i am porting the -- importing the natural gas. >> i'm an investor in the united states programs i could take a stake or investment in accelerator. >> that is great idea. >> what other opportunity because israel natural gas is a state-owned company. how might i get in on what you're building next three or four years to become a natural gas exporter? how can an investor here take part in that? what companies are you working here in the states to work with that infrastructure? >> you can invest basically, although we're fully owned by government we issued bonds, we are rated aa-plus and by moody's and s&p. you could invest with the company but more likely that you would like to invest with the partners around us from the developer, downstream, midstream and up here. >> here in the united states who is expressed interest in working with you or who are you reaching out to work with? >> we have a great partner here, noble energy.
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they are in israel since 2004 i believe. and they are part of it. amal and levithon. we're trying to make them happy. because it iss important for israel investor to get more into israel. that is the reason for the conference here today. you can invest with those companies and you can invest with other, we're planning to exporting terminal we were talking about before is basically 10, 12, $15 billion. we don't know exactly because we're in the middle. we will need partners to come build with us doing this. we're looking for added value capital. not just capital. >> we appreciate your joining us here on the fox business network. considering the future for israel, not too far future, literally the next two years, a country of 8 million people being an energy
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exporter. melissa: amazing. adam shapiro thanks very much. lori: all kind of events to guy guess for the week. my next guest says that the big driver is the fed stimulus thinking they will get more estimate us. we have axel merk chief investment officer. axle, a lot of investors are quick to criticize bernanke for another round of easing but what do you think is going through bernanke's mind why this is happening and why it is needed? >> sure. we don't like what the fed is thinking either but doesn't matter what we think but matters what he does. go back to the fomc minutes from a couple weeks ago where he indicated one of the tools the fed might be using is to promise to keep rates low, even as the economic recovery picks up. so that mean if economic data come in better-than-expected we'll keep interest rates low. everybody knows, at least we think he will have a qe3
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announcement. at the moment you announce it, people will price in and say what's next? in order to avoid that he needs to keep the carrot in front of the donkey and keep promising things down the road. reason by the way he does that whenever we have a economic pickup the bond market sells off and the does tightening for the fed and fed doesn't like that. lori: sure. i'm wonder if this is also part of the strategy considering there is so much politicking going around the $16 trillion national debt how to solve it, if you can ease inflation with another round of easing maybe you lower your debt-to-gdp ratio? >> that is one way to look at it. way bernanke looks to it the housing market continues to be the most important thing. he reiterated that in the jackson hole speech. there are three ways to fix it when people are underwater in the mortgage. you have themdown-size. have them pay off their debt. both options are not very attractive.
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the third option, raise the prize level. reduce inflation. nobody at fed will call it that. they need to have prices move up. lori: that is why they're buying mortgaged backs. from what i understand it will be open-ended. >> that is one of the proposals on the table. we'll have to see the specifics. they might indicate yes we'll print more money but do it after the election to be less political. in my mind those are details. the important thing to watch out for how he makes sure that the carrot stays in front of donkey so the market will price it in. 500 billion more. so let's move on with it it. lori: that is a challenge. that is great way to put it. update me on europe. s there are gyrations. we have news own greece, rejected a bailout by the troika. we're watching italy here arguing against conditionality with the big bond buying program announced last week. what is the story, axe sell? >> we think euro will continue to gain steam.
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partly everybody hated it two months ago. now it is less risky. we have the constitutional accord ruling on september 12th. we think in the unlikely event it will be rejected, it will be short temperature moyle but they will change the constitution. ultimately what the head of the european central bank has done is imposed a process on politicians. they're falling in line. falling in line doesn't mean there will be a smooth time. there is lots of bickering. there is election in the netherlands. ultimately the weak companies give up sovereign control over the budget. we have moving towards a political union is not exactly a great political union but then again where do politics work well? nowhere in the world. in the u.s. we have anywhere else we also don't get our budget in order but needs to be a political, not a monetary problem. we're moving that direction in europe. we expect the euro to get stronger and the dollar to get weaker. lori: we'll keep our eye on that. axel merk, thank you for the update. >> my pleasure. >> toys "r" us is jumping on the tablet wars.
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the retailer plans to debut a tablet just for kids in late october. the tablet will go for $149.99. wow, that is expensive. only available through toys 'r us and keep customers from testing it out in the store and buying it online from amazon. it faces competition from the three other tablets. between kurio 7, and mee p&l ex i-book. we have leap pad. lori: ipad, forgetting the obvious there. this is more free baby sitting. price tag on baby sitters is expensive. thinking about my baby sitting bill. melissa: i guess. i guess. i don't know. ipad and just about 100 bucks. more than that. toys 'r us suffered ad $36 million loss in the second quarter. leapfrog hurting on the back
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of that amazon too. there are a lot of different factors at amazon. but i don't know. lori: what will they ask for it at christmas? melissa: without question. doesn't seem how many tablets we have. lori: they lose batteries or lose the cables. can't find the parts for this one. melissa: just sort of grooed greed. lori: they have some choices of their tablets. my poor daughters only have ipads. they're really struggling. melissa: poor things. anyway, chicago's teachers are on strike today. mayor rahm emanuel calls it a strike of choice and says it is unnecessary. we'll ask lou dobbs after the break. i see him in the wages wings waiting to come on. lori: no big changes ahead. talking with axel merk about the fed. mo real movement in interest rates in the u.s. 1.68. no real movement in equities either.
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long bond coming in at 2.84%. back with more after this. [ male announcer ] what if you had thermal night-vision goggles, like in a special opsission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.
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>> i'm cheryl casone with your fox business brief. customers of amazon's new lineup of kindle fire devices can opt out of advertisements after all but it will cost them $15 to do so. amazon received backlash for saying consumers would be unable to avoid the ads. the gambling industry continues to provide a huge
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payout for the state of nevada. revenues soared 17% in july to just over a billion dollars. that is according to the latest figures from the nevada gaming control board. las vegas contributed to over half of that total. scott's miracle gro will pay half a million dollars in -- $12.5 million after improper use of pesticides. they pleaded guilt i applying pesticide to the wild bird food that proved to be toxic to wild birds. that is the latest from the fox business network, giving you the power to prosper
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melissa: chicago teachers are on strike for the first time in 25 years as negotiations between the city and teachers union hit more hurdles. does mayor rahm emanuel, who shared some of the spotlight at the dnc last week, have much room for negotiations with the school system that is expected to have a
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billion dollar deficit by the end of the year? lou dobbs is here with his take. >> great to see you. melissa: great to see you. >> i love this is strike of choice as far as rahm emanuel is concerned. this is the man who said no crisis should be wasted. >> right. >> here he is. let's see if wastes it or makes something of it. i really believe though, guys, this is really a kibuki dance. i believe all the major decisions have been made. i think this is carried out to inconvenience parents and shortchange students just so chicago get as taste of the impact of this strike, and then it will be accepting of whatever nonsense has been acreed to between karen lewis, the head of the teachers union and mayor emanuel. you want me to double up one more thing for you? melissa: yes. >> i see a little extra little steroidal political theater here with, think about this. what if in a few days, rahm
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emanuel, there is a guy we haven't heard from, the secretary of labor arne duncan, remember him? melissa: yes. >> obama's good basketball buddy. he hasn't been heard of. i'm thinking right now would be a great time, i'm just saying, maybe a few days, inconvenience a lot of, you know, a lot of tension and angry people. and in comes arne duncan at the behest of the united states and interseeds chicago political conflict. posing as economics. and resolves this whole thing. now this would be one way not to waste a crisis, don't you think. melissa: interesting? lori: what i wonder, right, so you've got this ripple effect. lost worker productivity. all of these kids. >> there is no productivity. talking about a school, for crying out loud there only five 1/2 hours. these kids are shortchanged it is ridiculous. lori: karnts not able to go
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to work. melissa: e-mail said arrange alternate care. if you're working parent, it is a nightmare. >> how much are you able to accept increase in teacher pay over next four years. 15%, 16%, 20%? what is the number? then you also have the added benefit of finding out where in the hell has arne duncan really been? lori: well, that's a great point. just to finish my other point in addition, you have idle kids out there. what happens if god forbid there is accident or something, kid in trouble because there is nothing more dangerous -- >> still responsibility of parents. some of the children are responsible for themselves. i'm talking about those --. lori: i'm just adding a point. >> think about this. this is also part of the reason we're in such a quandary until this country when it comes to public education. school is supposed to perform the function of parental supervision. it is supposed to be providing nutrition. for crying out loud, many schools are simply open to
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serve free meals today. this is the ignorance that is overwhelmed union, driven public education in this country. and look at it. watch the nonsense. politics. mark my words. this is political theater. you're going to watch it resolve and it is going to be nauseating at the conclusion. you don't want to miss it. melissa: now you predicted it. so they can't possibly trot him out. >> how long do you think the strike will last? they revealed their machiavellian motivation? melissa: i will stay tuned. glad i see you every day at this time. >> we can talk anytime you want. one of the great enjoyments of my day. melissa: see you here on 7:00 and 10:00 p.m. on fox business. today you will have a fabulous lady, liz ann sonders. charles schwab. what are you guys talking about? >> we'll talk about the markets. we'll talk about the economy. we'll talk about productivity and competitiveness. melissa: love it. >> we'll talk about the big
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issues that define and burn within the body politic. melissa: lou dobbs, thank you so much. >> thank you. lori: you have a better way with words. melissa: nobody. >> thank you so much. lori: let's get a market check with nicole. she is on the floor at her regular post. we do this every day. how many took place a day, nicole do you do the updates? melissa: 25, 30? >> 30. lori: what are you talking about today? >> talk about names getting attention. names higher year-to-date. analysts are still giving them positive comments. first is retailer. american eagle outfitters, american eagle got an upgrade at stern agee. it is a buy from a neutral. the new price target is $27 up from $25. the analyst has been talking about the fact they're working on their square footage domestically and working on a new plan to boost growth. it is up .75 of 1%.
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this is winner for the year up 50% to date. this is market perform for wells fargo. winners are still getting upgrades. this one in particular is up about 31% year-to-date. so you see there is still upside potential according to wells fargo. back to you. melissa: nicole, thanks so much. lori: congress is returning to action today. we can't get rid of lou. melissa: there he is. >> who would leave you. melissa: hanging out for the rest of the show. >> only reluctantly will i be forced out of here. lori: hang out. we're having a blast. there is no shortage of things that have to be done. they need to listen to lou. we'll look ahead to d.c., a long list of things on the agenda. that's next. melissa: but first, here a is a look at some of today's winners and losers as we head out to break. green mountain roasters
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lori: did you realize stocks are on track to have their best year since 2003? yeah. but is the market getting top heavy or does it have staying power. sandra smith in today's trade here is few of the reasons why they're questioning whether this rally will last the rest of the world. s&p 500 so far in 2012 up 14%. the highest level in more than four years. we're on track to see the best year since 2003. and, and this is key, the
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last note here, the s&p trading 13.3 times earnings. while that is below the average dating back to the mid '70s during a time of slow growth, morgan stanley is warning this is, these are very high expectations as we head into earnings. so here's a 3-year look at s&p 500. today we sit at 1435. obviously the highest level over the past several years. down a little bit today. here is what morgan stanley says. they're predicting a drop of 15% from today's level by the end of the year to 1214. let me get out the pen here, guys. i will show you 1214 would be a level we haven't seen since late last year. on the other hand bears private bank is talking about 1450. they say this rally this year will continue off the charts to 1450 but they're also saying if we get there, take some money off the table and hit the sidelines because they think that is time to take some profits. mole list sachs lori, a lot of questions as we hit the lofty levels in the s&p. lori: i like the
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football-style report with the telestrator and the play-by-play. sandra, thank you. melissa: congress is back in session after a five-week break but will anything get done with a month left in the fiscal year? rich edson has more. rich? >> we'll avoid a government shutdown next week. that's about it. billions in automatic spending cuts and failing postal service will wait until after the election. white house says the failure to address the fiscal issues, namely on congress and republicans and failure to raise taxes on wealthy americans. >> until republicans in the house in particular but also in the senate accept the wisdom of the vast majority of the american people of the bipartisan commissions looked at that, have looked at this, there is going to be a conflict. >> republicans say not so. house minority leader mitch mcconnell, trying to avoid responsible of problems we face or pressing challenges
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we have ahead, democrats simply sat on their hands, prefering to tell tall tales what is happening in washington rather than doing anything about it. they appear to ready to ride out the rest of the year doing virtually nothing about the problems we face as a nation. neither side sees much of a political benefit negotiating any larger issues until they know who wins in november. back to you. lori: until then, rich, it will be painful. i mean -- >> the problem, that's the thing. and you know, you try to game out what exactly is going to happen. the problem is major stakeholders right now don't really know what will happen because though don't know the results of the election. we're not talking about the presidential election. this has a lot to do what happens with the congress. a third of senate up for re-election that is why everyone is waiting this thing out. melissa: rich edson, thanks so much. lori: ford is driving ahead, expanding a plant in michigan to build cars to send to europe and bring jobs back from mexico. this is the automaker that did not get a bailout don't
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forget. tracy byrnes and ashley webster will have a look at the plant after the break. keep it here on fox business. [ male announcer ] it's simple physics...
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>> we're looking at a market down 12 points but i noticed before the market was open there were 83 stocks sitting at all-time highs. you feel like the market is going sideways and not doing anything but people are out there making money. >> we're at multiyear highs. ashley: we had a great run. ecb did last week. we're waiting for the fed. there you go. tracy: at least we have volume back too. very much so. ashley: so much for bad septembers. i'm ashley webster. good afternoon, everyone. tracy: i'm tracy byrnes. as everyone was talking stocks, everyone is taking a break from the stellar run. how will news from europe
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affect the jason trennert will weigh in a few moments. ashley: not stopping for retailers digging for gold in the market. we'll tell you which stores are in the best position to strike it big. that is coming up. tracy: a new school wants to reinvent private education around the dwrob. avenues opens with $75 million in funding and a tuition higher than that of most colleges. ceo chris whittle is just ahead. ashley: as we do every 15 minutes, nicole petallides is on the floor of the nyse. >> tracy, ashley, we're looking at market down 11 points. last week we gained 215 points. we have not given that back much here today. that was after two weeks of selling. last week was a winner. a lot of bulls will take it. we're hovering near the multiyear highs. banks have a lot on the move
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and. i want to look at aig in particular. a name we all have a special interest in being taxpayers. you may remember the government bailed out aig back in 2008 during the financial crisis. today is a big day for aig shareholders, for taxpayers across the country as basically the treasury department said it is selling $18 billion of the shares that they own. so now they're selling down their stake in aig. they had over a 50% stake. they're going down to 20%. so this is a very big deal. and you can see the stock is down 1.2%. back to you. ashley: nicole, thank you very much. tracy: all right, investors are expecting the fed to announce another round of stimulus on thursday. i don't know why but they are. this of course to boost our struggling economy. it may not be the best thing for the market according to our next guest. joining us jason trennert. jason you're skeptical, how come? >> i'm skeptical because you have diminishing returns
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with each successive round of quantitative easing. if it were this simple and have central banks print money and profligate politicians spend it there would be no need for free enterprise system. we could all go home and go water skiing. tracy: why are we even talking about qe3? >> there is significant risk of inflation. the ecb obviously senses that as well. it is certainly putting a floor, as we can see under asset prices but, i think they would view it as it takes away, chances for a lehman style moment which would be some sort of cat chrisic event. tracy: i would think we're beyond that, no? >> certainly after draghi it will be more than enough, it will be beyond that. i think there is political element in this as much as the fed wants to be above the fray. it is difficult for them not to do anything given, especially given the job numbers. tracy: i am by no means the sharpest tool in the shed but at the same time i can't understand why they don't
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get that it is not trickling down? you know we put this liquidity into the markets. a lot of traders that make a lot of money. banks holding cash. it is not trickling down. it is not creating jobs. >> tracy, i'm very sympathetic with you and as you've seen by some of the statements by people on the fed not just like it is a one-way bet. there are other costs involved with doing this. tracy: right. >> particularly when it comes to commodity prices. >> sure. and cost to value of the dollar. >> so you have all these other sorts of things. right now the cost hasn't been particularly high. bond vigilantes have been completely emasculated. at some point this is clearly not sustainable, the economy and market. reason why i'm cautious on the market because i think at a certain point, the fed is either have to go a lot larger or, people are just going to decide it will not have any meaningful impact on what the economy is going to do. tracy: if you're cautious on the market, does that mean you're not in it? are you holding more cash
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than normal? >> this is an interesting point because candidly stocks, if you have a long-term time horizon your only shot to get a real return, which is the return above the rate of inflation because right now what the fed is doing, essentially making it so you're making a negative real return. tracy: right. >> and so i think bonds are very expensive. not only treasurys but high yield and some corporates. i also think that real estate probably is still too expensive. so stocks to me are the, long-term way to go but only certain stocks. i think it will be increasingly narrow group of stocks that almost trade like bonds which are big, megacap stocks that provide dividend yields. sound consensus and cliche. tracy: other than the fed, quickly what keeps up at night? >> listen, not only is it size of our debt but way we're funding it. 60% of all our debt matures in the next three years. everyone else that has a mortgage or has debt is terming it out. tracy: right. >> they're taking longer.
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is government, for whatever reason is issuing floating rate notes. it makes the problem doubly concerning because eventually if you get any sort of backup in interest rates you blow a hole wide open in the budget. tracy: there goes your skepticism through the roof. thank you very much for being with us. jason trennert, strategic managing partners. >> thanks very much. ashley: ford is revving up production at its plant in michigan as one automaker that didn't take a bailout. they using production to bring it back to the states. jeff flock in flat rock, michigan, with the story, jeff. >> with an exclusive live look at the flat rock assembly plant, which at first time became all-ford facility. they shared it with mazda. they have taken it over. in addition to making must tangs to be sold around the world they will bring ford fusion production here. look at sales numbers on the fusion.
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they make it in mexico now but last month was the 6th straight monthly sales increase. over 20,000 sold. 181,000 sold this year. that's a huge number. that is up 7.5%. talked earlier today with mark fields of ford and the governor of mesh began, rick snyder. he is an interesting guy. republican but pretty much a nonpartisan type of guy who said the reason the work is coming into this plant because the uaw and ford get together. he says he wishes politicians could work together like the uaw and ford do. listen. >> how do you treat your family? how do you treat business people you work with? other people in your lives. why do we have a different set of boundaries in the political world to allow negativity to happen. i don't think it is constructive. i stay positive and solve problems and be better off together. >> tell you that sounds like a pretty simple solution, doesn't it. he taking heat from both
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sides. republicans call him a ry ino. republican in name only. democrats call him a scott walker. beautiful must tanks coming off the -- mustangs. coming off the production line. saved 1200 jobs to be added with fusion production. pretty nice deal. ashley: jeff flock what a wonderful analogy. thank you so much for that. that was terrific. very true. tracy: words of advice from our very own jeff flock. i love it. chicago's 25,000 public school teachers are on strike. teachers began walking the picket lines 6:30 a.m. local time this morning. the union planned a rally at 3:0 this afternoon. both side say they are close to an agreement on wages but are still really far apart on benefits. teachers are worried about a new evaluation system which they say would really too much on students
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standardized test source. officials say they need to cut costs because the system face as $665 million deficit this year. chicago mayor and former chief of staff to president obama, rahm emanuel said he is disappointed in the union's decision to strike and calls it a strike of choice. negotiations broke down late last night and started up this morning. we'll keep you posted on this developing story. but chicago's broke. ashley: it is broke. 25,000 teachers on the picket lines not good obviously. tracy: not good for kids starting the school year. ashley: hopefully you come to an agreement. how about this? harley-davidson shares surging 8%. we'll have that story ahead. charles payne weighs in. tracy: amazon changing its policy on mandatory ads for its new kindle fire hd tablet. we'll tell you how users will be able to skip the controversial ads. that is coming up. first as we do every day at this time of day let's look how oil is moving right now. it is down 27 cents.
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over 73 percent who reviewed 5-hour energy said they would recommend a low calorie energy supplement to their healthy patients who use energy supplements. seventy-three percent. 5-hour energy has four calories and it's used over nine million times a week. is 5-hour energy right for you? ask your doctor. we already asked 3,000. tracy: that time of day. time to make money with charles payne, stock to add to your portfolio to raise your profits. >> this is my post-convention stock because harley might be able to bring republicans and
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democrats together, okay? if you check out their gameplan. they say listen, core riders are older white device between, 65-74, that population will go up 40%. that's huge. we'll throw in young adults. throw in women. diversified customers. they don't have a problem in america to be honest with you. america is really rockin'. obviously outside of america. they have a big presence in europe which is not helping them at all. the stock has come down a lot. they haven't really have had bad earnings. they haven't blown the cover off the ball. the stock is down to the point where it looks attractive in today's session. it looks attractive breaking through the 200 and 50-day moving average. ashley: where will they come from, charles? i thought they were looking overseas for growth. europe we know what they're doing right now. asia? >> asia has got huge potential. i don't know how a 1200 cc harley will work in most asian markets. tracy: they don't want a cruiser. they want bikes they're making out there. >> people like american
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products there is nothing like a harley. i had a harley for two weeks, so i know. tracy: my family all have harleys. i have i actually have an uncle in that age bracket. >> 65-74? >> that's right. >> does he ride the three we will joint? tracy: no. >> i saw the three-wheel. that is little embarrassing. you have to drive wear a helmet if you're driving three wheel motorcycle. not for protection but nobody hose who you are. you imagine me riding a three we will motorcycle? i would be so embarrassed. i could see you now. black leather. >> got the sweater. you need a harley leather jacket. ashley: tracy, "easy rider", byrnes. it is all about the leather. as we do every 15 minutes,
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nicole petallides on floor of nyse. retailers getting hurt. have you own ad harley, nicole. >> i'm grad to ride one of the i love the outfits. a great american company. i love motorcycles. so sign me up. look at a retailers, totally different, michael kors. not harley retail. michael kors talking about certain shareholders even some of the management now, some members of management will tend to sell about 23 million shares of this retailer in the secondary offering. you see the stock right now, right when you have a secondary ito/ dilutes the shares. so shareholders don't love that but that's what happens. it is down 4.25%. you remember this ipo back in december of 2011. the stock is up more than 100% this year. their outlook going forward for north america and europe is going good for the double-digit sales growth they expect in same-store sales. apparel, watches, all kinds of things they're doing pretty well.
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yeah, that's what we're looking forward to. 4.3% to the downside. ashley: just slightly lower. main we get it back up to normal by the time we're finished. nicole, thank you very much. we'll check back in with you in 15 minutes. coming up when a company spins off a business which stock is the better business? that is good question. credit suisse has been crunching numbers for more than a decade and we'll find out what they found out next. tracy: look how the dollar is doing against its foreign currencies.
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>> 20 minutes past the hour i'm lauren green with your fox news minute. the mayor of trenton, new jersey was arrested this morning the victim of a fbi corruption probe. federal prosecutors claim mayor tony mack took bribes ñ pg garage in the city. his brother and campaign supporter were also arrested. the federal government is expected to formally recognize rescue workers and residents living in the area of the twin towers in 9/11 may have gotten dozens of types of cancers from toxic dust in the towers collapse. it will allow them access to a $4 billion compensation fund. >> peyton manning is back. the star quarterback made
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his return to the gridiron last night after missing all of last season. manning made his denver debut a success defeating the pittsburgh steelers throwing for 253 yards and two touchdowns, one which was the 400th of his career. those are the news headlines on the fox business network. back to ashley and tracy. >> lauren again, thank you very much. those were some good football games, yes they were. number of big-name companies are plan planning spin yufs. are they good buy or stick with their parent company? we have the head of quantitative research from credit suisse looks at spin-off performance for the past 17 years. that is long time. he joins me now with his analysis. do spinnoffs create or destroy value? let's begin there? >> thank you, and good afternoon, ashley. let me start with the answer, yes in general a spin-off
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creates value. our study for the past 17 1/2 years indicate that. how the investors deal with it the volatility with that value creation process. ashley: as you look at these spin-offs over the 17 years. what are some of the things you noticed, the trends? one thing i notice the spin i don't have value dips immediately and how long? >> that spin-off value dips immediately after the announcement date. one of the main reason the spin-off value dips after the announcement date, the main company, the parent company can be part of an index. the spin-off may not be part of the index. so most of the portfolio manager if they can not hold a stock which is not in a any index they will sell it. also, when a spin-off happens, they get new company shares which they never intended to buy that. some they get in on that right away. also as a new spin-off, there is less analyst
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coverage. other thing finally, if it is a new spin-off by definition has not that long history. most people avoid that. ashley: how does the parent company do, generally as you look across, not just in the short-term but in the long run? how does the performance of the parent company compare with the spin-off? >> on that we looked at performance all the way from 30 days to 12 months after the effective date. parent company outperforms in next 12 months by nine.6%. that tells us it does create value. but as i said, keep in mind there is a lot of volatility in the first 30 days. ashley: yeah. definitely volatility. so how does an investor play this? is there, is there an etf that exists for spin-off plays? >> i'm not aware of any etf i knew there was a etf a few years ago but i'm pretty sure it doesn't exist right now. one way to think about the investors to look at the
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spin-off company. they should think about buying this after the announcement date, five or seven days of at announcement date. that is when it goes down most. and then hold it for 12 months and, and, experience the volatility while they're waiting. ashley: so the best, you're saying to maximize profits, hold it for at least 12 months, is that what you're saying? >> that's correct. ashley: all right. very interesting. so we have some spin-offs coming up. we have kraft spinning off its foods division. sears spinning off albert stores and hardware stores. do you think those are good buys? >> in longer term they do create value, as i said, but you have to bear with the volatility. keep in mind when we looked at the study over 17 1/2 years, most of the value or most of the outperformance came during the tech bubble and after the tech bubble. so even over the 17-year
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period there is a quite of a volatility. ashley: you have to prepare for that. thanks very much. from credit suisse. really appreciate your time. thank you. >> thank you, ashley. ashley: interesting. tracy: this story is right up your alley, ash. ashley: yeah? tracy: britain's government is taking action to help boost its struggling economy without adding to its deficit. the country's business secretary plans to cut regulations on companies and scrap thousands of health and safety rules. small shops, offices and bars will be exempt from inspections and will only be liable for breaches of safety rules if negligence is proven. this comes after british prime minister david cameron said he will losen planning rules to help stimulate the construction sector. i read this first and say, how could you lose loosen up on safety and health standards. ashley: health and safety standards have stupid rules, every cliff has beware of cliff. every sippy cup, contents
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could be hot. very, very obvious things put in place. it is ridiculous. tracy: so it is a good thing? ashley: it is a good thing i think in that case because it is just over the top. tracy: you said our studio would fail british standards. ashley: too many cables. we're up --, it would fail. big fine. i'm not going to say that. young americans counting on their parents to leave them money to pay for their retirement. ha, good luck. gerri willis has results of a disturbing new study next. [ male announcer ] let's say you need to take care of legal matters.
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>> welcome back. aig stock is falling on whether the federal government will sell 18 billion dollars worth of shares in the insurance company. that will reduce the government's stake in aig to 20% from 53%. aig shares down as you can see just slightly on the day, down about 1% but certainly off session lows. amazon making an about-face over mandatory ads on its new kindle fire hd tablet. the company now says it will allow users to opt-out of the ads, but you have to pay a $15 fee. and a bigger than expected drop in chinese imports is the latest sign that the world's second largest economy is indeed slowing down. coming up, we will tell you how major western retailers are still making an aggressive push into china. that's coming up. tracy: good stuff, but now bottom of the hour, 30 past, we have to get a check on the markets as we do every 15 minutes. nicole petallides on the floor of the new york stock exchange.
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you have three tech giants having a good day today. nicole: we were just looking at one there, amazon hit a new high. also wanted to take a look at both apple and google right now. you may see down arrows they may have come off the highs. sometimes you see people selling into some gains there. take a look at apple, 1.8% to the down side. these names have all hit new highs. apple all-time high. google a multiyear high. and amazon as well a a new high. so when you're looking at these three names, in particular, we're talking about apple. everybody has so much anticipation for the iphone 5 and that's bringing in obviously tons of revenue for apple but also may contribute to shopping gdp numbers who knows. also apple's internet streaming music that we have talked about over the last week, competitor to pandora. and google the operating system, the android operating system that they use as well, that's been very successful, motorola. those are three names that we're watching very closely. did it new highs despite the fact you see some down arrows
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here. tracy: ashley is right, moving the market a little. dow is only down 6 points right now. see you in 15 minutes nicole. today's youth are confused. [laughter] tracy: because they are not worried about paying for retirement, according to a new study because they are assuming they are going to get an inheritance from their parents. clearly this might not be the case. gerri willis joins us now. what would give them that idea? ashley: wishful thinking. >> confusion. living in a dream world. well, it's fascinating because generation z, these are kids 13 to 22, all right you don't think that retirement is necessarily on their radar; right? ashley: no. >> it certainly wasn't for me at that age. but they are undersaving compared to generations x and y which save -- 59% of them save and 56% of y save.
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that's impressive. amazing; right? i can't explain to you why but i can tell you their parents say there is no inheritance. miscommunication the generations aren't talking to each other. ashley: we will be having some bills we will pass on too. >> exactly. tracy: there might be debt. >> and understand that this generation believes that there will be no social security for them. 35% say we know there's going to be no social security for us, however, mom and dad will provide. so go figure. this is kind of wishful thinking that gets you in the poorhouse. tracy: it is interesting to me because i would think that generation witnessed potentially parents getting laid off, you know, really struggling to get into college, don't have the money. they were home for it. they saw it all. i'm surprised they are so optimistic. >> you wonder how much mom and dad talked about all this and in detail and the stress of this, maybe that's some of what's going on here. but i have to say there's nothing like mom and dad to train you on how you spend your money and how you save your money. you learn those first lessons at home. tracy: that's why i start every
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day with good morning i'm broke. [laughter] tracy: don't ask me for anything. ashley: brutal but honest, i love it. make sure you watch gerri tonight, willis report 6:00 and 9:00 p.m. eastern right here on the fox business network. ashley: i'm broke. any questions, kids? don't ask for anything. coming up, china's economic prowess may be slowing but retailers are still fighting each other to gain a foothold in the market. we will tell you who is winning that battle next. tracy: first as we do every day, let's see how the 10 and 30 year treasuries are moving right now. the 10 year is up 1 basis point, 1.69%. 30 year, the same, up 2 basis points, 2.84%.
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robert: i'm robert gray with your fox business brief. bp is selling some of its deep water gulf of mexico oil and gas properties to texas based plains exploration and production. the price tag there, 5 1/2 billion dollars. bp is selling off assets to try and pay for damages from the 2010 gulf oil spill. the deal is expected to close by the end of the year. eastman kodak will cut an additional 1,000 jobs by year's end as part of its restructuring the plan. the bankrupt company already shed roughly 2700 positions from its workforce this year. and burma will get a taste of coca-cola for the first time in six decades. the soft drink maker is teaming
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up with a local company to open up a bottling facility in burma. coke wants to start production there as soon as possible. that's the latest from the fox business network giving you the power to prosper.
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tracy: "wall street journal" hosting the innovate invest israel conference here in new york highlighting the investment opportunities in israel. our very own adam shapiro at the event with a special guest. hey adam. adam: hey tracy. the director general of the israeli ministry of finance is joining us now. one of the things that you hear at this conference is brain power, rupert murdoch the ceo of our corporation talking about human capital and how israel so -- so successfully tapped that resource. how many of the men and women serve in the israeli defense forces who come out of the
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security branches with a technical it background and go into private practice. how important has that been for israel to become a world leader in technology and for your economy? >> we like to preserve our advantage. in order to do that, what we are doing, we are increasing significantly in the past several years budgets, participation in the budget of universities and budget for education for elementary school, for high school an even for kindergartners. adam: you talk about budget ets and increasing spending on education. here in the united states we are having great debate over budget. israel faced drastic economic situations in early 80s. how did israel get hold of its financial problems to the point where you now have an economy that is on par with that of a country in europe? >> i think discipline.
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that's the answer, discipline. when we come to literally almost bankruptcy in the mid 80s, then we took ourselves and started to be disciplined in fiscal discipline and working within the framework and since the mid 80s and then we create some rules in early 90s and past nine years we are strictly disciplined in the framework of budget and deficit. and we cannot break this framework. and this is something that all politicians in israel understand and follow, and this is why i think we gain trust of investors and we gain trust of the lenders and we manage to overcome our economy. adam: you know, you're in a part of the world where you are surrounded by neighbors who are are hostile to your economic interest and yet the economy of israel has grown in the last 20 years, something on average of 8% every year. it's down to about 3.8% at this point, but that's still a gdp we would be envious of in the united states.
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how do you keep going forward when you have neighbors who are, you know, in favor of destroying israel? how do you get investors to say look we're going to be around forever? you should bring your money here. >> you mentioned before that sometimes we take even the disadvantage -- we have to spend money on difference and utilize the innovation of difference. not only that, we use the fact that we are in the desert to be innovative in agriculture, in water treatment, in any kind of thing that we need for living. this innovation, the fact that human capital is a major asset is what is keeping us alive. adam: i appreciate you being with us on fox business network. you know, we have been talking with different people from different sectors of the israeli economy. we have heard how in genetics they are going forward with drought resistant crops and working with people in the united states. the director general of finance ministry and i were talking about the fact that 75% of the
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water that israel used in agriculture is recycled and almost all drinking water in israel come within the next year or two will be from plants that desalinate. a country on the forefront of some of the things we are dealing with in the united states. we will have more on this. back to you. tracy: thank you very much. ashley: my next guest says -- beware of the siren call of asia. the siren would tempt ships on to the rocks. why should u.s. retailers be so wary as they look to asia and china in particular? >> it is a very good question. first of all, it is a call. it is incredible opportunity, 140 billion dollars apparel retail market, but there's a lot of hazards, the rock so to
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speak. these retailers have to know they are consumer. it is a completely different consumer in asia. ashley: how are they different? >> first of all, the consumer there needs to rely more on a loyal brand. they need to know there's a strong brand behind it. what works in the west doesn't necessarily translate to the east. different set of cultural differences, etc. in addition to that, you have got competition that's very different. in the u.s., it's a pretty, you know, controlled landscape of a lot of u.s. competitors. when you go to europe, sure, it's pretty interesting there. but again, it's a lot of european competitors. asia, it is global competition. it is a hypermarket. you have companies like it and other companies. ashley: doing business in china we know is famously difficult, how difficult is it for a u.s. retailer to go in and set up
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shop? should they go in small and expand or just saturate the market? >> it is interesting because you have several different approaches that these companies are beginning to take. on the one hand, some companies, like abercrombie & fitch and the gap want to own and control their brand. they want to open up their own stores and expand from there. other companies want to do franchising. neither way is necessarily proven to be correct at this point. what we do know is these companies neee to spend a lot of money up front, as much as 1/2 billion dollars in marketing just to establish their brand before they grow. ultimately, we think one of the most successful ways is going to have to do with whether or not it's a strong brand, like, for example, we think one of the leaders is going to be the limited victoria's secret division. ashley: already has a name. >> global name out there. in addition, the competitive environment, not nearly so developed, very fractured. there's no one leading intimate apparel retailer. so in that case you have a company that's going to be able to go in, couple years from now, not right away, probably not
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going to happen immediately, but they are going to go in and begin to open up, we think they could be one of the most successful out there in asia overall. ashley: very interesting. thank you very much for being here. >> thank you. ashley: companies really have to do their research before hay get into asia -- before they get into asia, spend the money on marketing as john was saying and in the long-term the potential is amazing. it is a different market. you have to learn it. interesting. tracy: good stuff. quarter till the hour, time for stocks a as we do every 15 minutes. nicole petallides still ton floor of the new york stock exchange. -- still on the floor of the new york stock exchange. nicole: hewlett-packard, dow component, it's obviously had a rocky road, multiple management changes that we've seen over the last few years. here's a look at it today. it's up 1.6%. it is one of the better performers on the dow jones industrial average. couple of things, number one, they are going to lay off more people than originally planned so now they are going to lay off 2000 more employees over the previous estimation.
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so that will bring the headcount reduction to about 29,000 people. so that is a really big deal. at the same time, don't forget, hewlett-packard and dell have a huge rivalry and meg whitman has been trying, working on a big turnaround plan that she said will take three to five years. when she said that, this came on the heels of their latest numbers that last month they reported the worst ever loss in their 73 year history. part of a big turnaround plan. back to you. tracy: stock has had a rough ride. thanks nicole. coming up, he helped pioneer the charter school movement. now opening up a multimillion dollars elite private school in new york. avenue's ceo will tell us now how he's trying to change the future of education. ashley: first let's take a look at some of today's winners and losers as we head into the break. the dow just off about 10 points. we will be right back.
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ashley: we have got breaking news for you. go daddy is experiencing widespread outages. the web and e-mail host tweeting on its official account quote status alert, we are aware of the trouble, people, that we are having with our site. we are working on it. we will keep you posted on that story. tracy: all right, forget college, avenue a new school opening in new york city today
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costs more per year than it would to send your kid to harvard, but with thousands of applicants for the school's first year, a lot of parents clearly think it is worth the money. let's see what makes this school so unique. joining us now is the ceo of avenue. it seems to me that what makes this different is the international aspect. >> that's a big part of it. the key part of our plan is to prepare children for the global lives that they are likely to lead and there's three ways we do that, language is one, making sure they study significantly overseas and then history programs that really teach them about other cultures. tracy: which is interesting because i think that's one of the things we lack is history, geography. you know, no one knows where anything is on a map these days. currently you said you received 2000 applicants. you accepted 1600 students? >> we received 2,600 applications and we started school this morning with 730
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children. tracy: i know suri cruse is one of them so there's a lot of press out on that. these kids are spending half the day speaking another language? >> each child has two classrooms. they have an english classroom that they are in half the day. then they have either a mandarin or spanish classroom that they are in the other half of the day. they basically go to school in chinese or spanish half of their day. tracy: you are planning on open other campuses which i guess you will do exchange with, you are saying you want these kids even in the grade school to experience overseas? >> starting in middle school and high school, we want every one of our children to study in china, india, africa, latin america and europe before they graduate from high school. tracy: you've got 70 million dollars through private donations clearly other people think this is a good idea.
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is this some sort of a knock on the public school system? >> i don't think so. we think diversity and options are good for education, and that all kinds of schools are the answer to better schools. tracy: clearly a lot of other people agree with you, sir. good luck with it. and come back when you have more campuses. >> thank you. tracy: thank you. good stuff. all right. moving on to this amazon story. let's talk about backtracking. amazon has backed away from a controversial ad plan that would have forced users of its kindle fire to sit through ad supported special offers. dennis neal covering the story for us now. >> it raises a question, tracy, how much would you pay to avoid the announce of on-line ads? amazon has decided that for customers with the newest kindle fire tablet is price is all of $15. the biggest most powerful retailer in cyberspace backed down over the weekend amidst a backlash over its plans to zap ads to the opening screen of the new kindle fire tablet.
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amazon uses the ads to keep kindle costs down. but its new plan gave customers no choice but to take them. kind of like the godfather, an offer they couldn't refuse. but now amazon has a price on the pain of advertising. if you want to avoid pop-up ads on your new kindle fire, you will have to pay amazon $15. it is a revealing concession at a critical time for amazon as it faces new competition from google's nexus, microsoft's new surface and maybe a mini ipad apple may unwrap next month at the same time amazon's kindle fire for the first time a $500 tablet aimed at the ipad in the rich end of the market. amazon needs all the revenue streams it can get. the ceo says it will lose money on tablet sales so it can make money on amazon orders customers place through the kindle fire. not to worry though amazon says only a small number of customers
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now opt-out of ads on the simpler cheaper kindle e reader, costs an extra 20 bucks. amazon says it doesn't suspect many takers to opt-out of ads on the kindle fire -- kindle fire either. tracy? tracy: thanks. ashley: as stocks hold on to 2012 gains it could be their best year in years. does this rally have staying power? that's a big question. sandra smith has details. sandra: everybody is asking themselves that question because historically this is the worst month for stocks. everybody wants to know should we take our profits and go home or stay in this thing? the s&p up 14% this year highest level in more than four years. could be the best year since -- since 03 if we stay on this track. it's trading at 13.3 times earnings, it's below average, but it's still pretty high expectations.
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analysts at -- some analysts believe the s&p will fall by the end of the year. take note some of the stocks in here, like gap the retailer trading at a p-e of 20, very pricy, expedia, 21. i found a cheap one for you as i hand it back, sea gate technology, a p-e of just 5, underperforming the broader market and very cheap compared to the broader market. the one to watch. back to you. ashley: very good. some home building stocks in there which is encouraging. thank you. liz claman is ready to take us through the last hour of trading. the ceo of a cybersecurity firm will join her to discuss how he is making money by keeping people's information safe. countdown to the closing bell is next. are we there yet?
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liz: good afternoon, everybody, i'm liz cla i